The center-left coalition led by Bersani took 121 Senate seats while Berlusconi's center-right took 117 seats, according to Reuters. Comedian Beppe Grillo's protest party, the "5 Star Movement," has become the largest single party in the lower house, having gained a quarter of the vote.

Researchers at Citi said Italy's parliament had been "hung, drawn and quartered" by the election result.

"This result extends political risk in the euro zone," the Citi note said on Tuesday. "The high political uncertainty that is likely to persist in the coming period will likely have a negative impact on real and financial investment decisions in Italy."

The researchers concluded that the over-performance by Grillo and under-performance by Monti were "clear signals" of the anti-austerity message conveyed by voters, which could make further fiscal consolidation efforts "very difficult to implement".

Italy's politicians can either form a grand coalition between Bersani, technocrat Mario Monti's centrists and Berlusconi's center-right group or risk another technocratic government if they are to prevent further elections within twelve months, analysts have told CNBC.

Though Bersani and Monti have said all parties must work together, anti-Europe, anti-euro and anti-austerity parties headed by Berlusconi and Grillo have received 50 percent of the public vote, sending a clear signal to politicians that there is no mood for more austerity dictated by Brussels.

If these options are not successful, new elections could be held within the year. Meanwhile, Italy's vital reform program could be stalled or obstructed, potentially damaging the country's economic recovery. There are growing calls for electoral reform in Italy to prevent hung parliaments in the future.

Ten-year Italian bond yields have risen 17 basis points to 4.55 percent , since the news of an uncertain outcome spread on Monday but the Italian treasury is going ahead with a sale of 6.5 billion euros ($8.5 billion) of 5 and 10-year bonds on Wednesday.

"The absence of cohesive political leadership may also make euro zone crisis management more complicated," Citi said.

"All this is likely to cause wider and more volatile government bond spreads in the coming weeks/months. Moreover, pressure on Rome is likely to result in some form of external financial assistance, but unsettled politics may significantly delay any agreement in this respect."